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2017 ICCR Governance Wins

Splitting the Roles of Chair/CEO for Better Checks and BalancesInvestors call for separation of a corporation’s CEO and Chair positions as a matter of good corporate governance, and to ensure a stronger system of checks and balances. Resolutions requesting separation of the two positions received votes of 47.01% at Express Scripts, 42.79% at Johnson & Johnson, 42% at Emerson, 39% at Chevron, 34.50% at Abbvie, and 25.81% at Pfizer. The Needmor Fund pressed Wells Fargo to separate its CEO and Chair positions following a series of high-profile banking scandals, and the bank complied by amending its bylaws, helping bring greater accountability and independence to the two roles.

Disclosing Lobbying Expenditures to Enhance AccountabilityInvestors are calling on companies to fully disclose their lobbying expenditures as lobbying can have a distinct impact on who gets elected and what laws and regulations are put in place. This year, resolutions challenged companies to be more transparent about their policies and procedures governing lobbying. A lobbying resolution won 42.3% of the vote at Royal Bank of Canada, at First Energy, 41.5%, at Emerson, 40.0%, at Nucor, 37.8%, Traveler’s 37.4%, Disney 36.8%, AT&T 35.47%, Cisco, 34.9%, Duke Energy 33.3%, Motorola Solutions 33.3%, CenturyLink 29.2%, Chevron 29%, Monsanto 28.3%, ExxonMobil 27.6%, Calpine 27.5%, and at IBM 26.54%, and AbbVie 26.6%.

In addition, a group of investors led by the Daughters of Charity - Province of St. Louise, Mercy Investment Services and the Christopher Reynolds Foundation pushed Johnson & Johnson, Pfizer and Walgreens Boots Alliance to increase their disclosure of how much they spend each year on lobbying, shining more light on the influence of “dark money” in the U.S. political process.

Increasing Oversight of Corporate Political SpendingDisclosure of corporate political contributions is in the best interest of companies, their shareholders and the general public, and enables the electorate to make informed decisions and give proper weight to different speakers and messages. A resolution calling for disclosure of Emerson’s political contributions won 40.25% of the vote, Wyndham Worldwide’s 37.7%, Range Resources’ 36.38%, and AT&T’s 30%. Sparked by resolutions filed by As You Sow and Trillium Asset Management, PNC Financial Services and Pinnacle West made progress by agreeing to publicly disclose their corporate political spending on candidates and political parties, and to increase the degree of board oversight.

Taking a Stand through Proxy VotingThe Center for Community Change, Trillium Asset Management and Walden Asset Management challenged the proxy voting records of large portfolio managers on ESG issues like climate change, by filing resolutions requesting a review of their proxy voting. These firms have voted against virtually every social and environmental resolution in recent years. This pressure led BlackRock and JPMorgan Chase to publish new positions on the urgency of addressing climate risk, opening the door to vote in favor of specific climate-related shareholder resolutions, and on workplace LGBT inclusion.

Protecting Shareholder DemocracyInvestor Voice pressed Simon Property Group via a shareholder resolution to adopt a simple-majority formula for tabulating the results of votes on shareholder proposals, and the company agreed, ensuring that investors’ voices are heard and respected in major management decisions. In a dialogue with Alexion Pharmacuticals, Investor Voice used the potentiality of filing a resolution as leverage to convince the company to change its voting policies to adopt a simple-majority standard. It also filed a resolution defending shareowners’ right to call a special corporate meeting, which garnered 31% of the vote at Chevron.

Clawing Back Executive Pay for MisconductAfter public outrage over its aggressive drug price increases, and after receiving a resolution filed by members of ICCR’s domestic health care team, Valeant Pharmaceuticals agreed to “claw back” some of its executive incentive pay, and include provisions for misconduct beyond what is currently mandated in Dodd Frank.